Why 2025 should be a year of action for climate transitions in FLAG sectors

2025 will continue the trend of climate transitions for the Forest, Land and Agriculture (FLAG) sectors.

At first glance, this viewpoint on FLAG sectors is surprising, given recent events. The change of political leadership in the United States, the re-emergence of populist and isolationist politics globally, and the EU’s delay to its deforestation regulation suggest that momentum on policy-driven climate actions could be slowing. However, looking at the bigger picture it is possible to see signs that climate transitions will be present and material in 2025. 

Leadership on protecting and restoring nature will be at the forefront in 2025, especially in Brazil 

The policy landscape for FLAG sectors is constantly evolving, but the trend continues to point towards heightened action. From global summits to regional legislation, 2025 will see greater emphasis on the risks and opportunities created by the land economy transition. 

• Leadership at COP 30: COP 30 will be hosted in Belém in November, and President Lula has made clear that nature will be top of the agenda at a summit where countries will be expected to have delivered enhanced Nationally Determined Contributions (NDCs). 
• Domestic actions in Brazil: Brazil is backing up its global leadership stance with domestic investment partnerships. The public and private sector momentum was evident in the announcement of the Brazil Restoration and Bioeconomy Finance Coalition in November, with a goal of investing at least USD 10 billion by 2030. 
• Forthcoming trade restrictions on deforestation-linked goods:  The European Union remains committed to the EU Deforestation Regulation policy to reduce emissions through imported goods. Despite a delay in implementation, by the end of this year, companies importing major commodities (cattle, cocoa, coffee, oil palm, rubber, soya, wood and certain derivative products) will be required to comply with the policy or risk losing their access to the EU market. Actors throughout the value chains of these goods will be ramping up their efforts to achieve compliance throughout 2025. 

Companies and financial institutions are continuing to take a leadership role 

Corporate and investor actions include increased disclosure, developing sustainable products and investing in climate-smart solutions.  

• Disclosure: Disclosures of risks are increasingly mainstream. CDP, Task Force on Climate-Related Financial Disclosures (TCFD) (whose recommendations are now managed by the International Financial Reporting Standards Foundation) and increasingly Taskforce on Nature-related Financial Disclosures (TNFD) provide a “public policy neutral” incentive for companies to report, disclose and act across their operations, supply chains and investment portfolios.  
• Sustainable Products: We are experiencing the emergence of sustainable alternatives – alternative dairy and egg products are forecast to grow 4 to 8.5 times in market value by 2030. Sustainable products are already outgrowing conventional peers, evidenced by a faster five-year growth rate of nearly 10 percent (five-year CAGR) compared to conventional products (6.4 percent).  
• Investment: Investment in solutions is also rising. For example, forest conservation and restoration seeking to access carbon credit markets raised USD 8.5 billion in Q1 through Q3 2024, compared with USD 5.3 billion in 2021.  

Technology is offering increased opportunities for FLAG sector companies and investors to act 

Recently, our colleague Matt Piotrowski identified three climate tech trends to keep an eye on in 2025 for companies and investors in FLAG sectors. These trends show that climate tech disruptions are becoming a core feature, not a bug, of today’s land economy. 

• Creating a pathway for smallholder farmers: Agriculture research institutions such as Embrapa in Brazil are developing strategies to integrate solutions such as agroforestry and silvopasture for farmers of all sizes. Major philanthropies are also placing an investment focus on smallholder farmers, such as the recent USD 1.4 billion commitment by the Bill & Melinda Gates Foundation. 
• Improving productivity: In recent years, high-tech market leaders actively reduced their emissions footprints and increased competitiveness through precision agriculture technologies and automation. In forestry, the rapidly increasing suite of geospatial tools allows climate tech startups to monitor forest growth with high precision. 
• Targeting methane in production processes: Reducing livestock methane emissions is a particular focus because of the high abatement potential. For example, investment in feed additives can reduce methane emissions by 10 to 40 percent. At COP28 a new initiative raised more than USD 60 million for research into the rapidly growing suite of tech solutions that can reduce methane from livestock.  

What does 2025 hold for Orbitas? 

In 2024, Orbitas made great strides in illuminating these trends. Looking back at 2024, we’re proud of Orbitas’ work engaging companies and investors in FLAG sectors, providing critical insights into the financial risks and opportunities driven by climate transitions. We led deep dives into Brazilian cattle and soy production earlier in the year and developed a suite of tools to help stakeholders understand climate transition impacts on these sectors. More recently we showed the global picture of climate transitions for the land economy, and how companies and investors should respond. 

In 2025, Orbitas will dive deeper into the investible propositions these trends are creating. For example, we are starting 2025 by examining the investment potential of restoration in Brazil. Here, financing mechanisms such as voluntary carbon markets could play a significant role, working in parallel with the demand for sustainable forest products. It is therefore encouraging to see experts predicting carbon markets could be poised to rebound in 2025. Restoration is attracting particular attention – including a collection of some of the world’s largest and most climate-ambitious companies known as the Symbiosis Coalition which published its first RFP to provide up-front capital from credit buyers for high-impact restoration investments. 

We believe that understanding and preparing for the risks and opportunities driven by climate transitions is essential to the long-term success of the land economy. Orbitas was established to create a hub for economic and financial analysis that clarified the value at stake from ignoring climate transitions for FLAG sectors responsible for nearly a quarter of global emissions. The information gap is beginning to close, though significant work remains. The next step is motivating greater action.  

Join us in 2025  to develop new research, pilot projects and best practices for managing climate transitions across the land economy.

Orbitas is actively seeking new partners as we redouble our engagement with stakeholders across FLAG sectors exposed to climate transitions to help them navigate a prudent path forward.  Fill out the form below to get in touch with our team to see how we can navigate climate transitions together.

Why 2025 should be a year of action for climate transitions in FLAG sectors

2025 will continue the trend of climate transitions for the Forest, Land and Agriculture (FLAG) sectors.

At first glance, this viewpoint is surprising, given recent events. The change of political leadership in the United States, the re-emergence of populist and isolationist politics globally, and the EU’s delay to its deforestation regulation suggest that momentum on policy-driven climate actions could be slowing. However, looking at the bigger picture it is possible to see signs that climate transitions will be present and material in 2025. 

Leadership on protecting and restoring nature will be at the forefront in 2025, especially in Brazil 

The policy landscape for FLAG sectors is constantly evolving, but the trend continues to point towards heightened action. From global summits to regional legislation, 2025 will see greater emphasis on the risks and opportunities created by the land economy transition. 

• Leadership at COP 30: COP 30 will be hosted in Belém in November, and President Lula has made clear that nature will be top of the agenda at a summit where countries will be expected to have delivered enhanced Nationally Determined Contributions (NDCs). 
• Domestic actions in Brazil: Brazil is backing up its global leadership stance with domestic investment partnerships. The public and private sector momentum was evident in the announcement of the Brazil Restoration and Bioeconomy Finance Coalition in November, with a goal of investing at least USD 10 billion by 2030. 
• Forthcoming trade restrictions on deforestation-linked goods:  The European Union remains committed to the EU Deforestation Regulation policy to reduce emissions through imported goods. Despite a delay in implementation, by the end of this year, companies importing major commodities (cattle, cocoa, coffee, oil palm, rubber, soya, wood and certain derivative products) will be required to comply with the policy or risk losing their access to the EU market. Actors throughout the value chains of these goods will be ramping up their efforts to achieve compliance throughout 2025. 

Companies and financial institutions are continuing to take a leadership role 

Corporate and investor actions include increased disclosure, developing sustainable products and investing in climate-smart solutions.  

• Disclosure: Disclosures of risks are increasingly mainstream. CDP, Task Force on Climate-Related Financial Disclosures (TCFD) (whose recommendations are now managed by the International Financial Reporting Standards Foundation) and increasingly Taskforce on Nature-related Financial Disclosures (TNFD) provide a “public policy neutral” incentive for companies to report, disclose and act across their operations, supply chains and investment portfolios.  
• Sustainable Products: We are experiencing the emergence of sustainable alternatives – alternative dairy and egg products are forecast to grow 4 to 8.5 times in market value by 2030. Sustainable products are already outgrowing conventional peers, evidenced by a faster five-year growth rate of nearly 10 percent (five-year CAGR) compared to conventional products (6.4 percent).  
• Investment: Investment in solutions is also rising. For example, forest conservation and restoration seeking to access carbon credit markets raised USD 8.5 billion in Q1 through Q3 2024, compared with USD 5.3 billion in 2021.  

Technology is offering increased opportunities for FLAG companies and investors to act 

Recently, our colleague Matt Piotrowski identified three climate tech trends to keep an eye on in 2025 for FLAG sector companies and investors. These trends show that climate tech disruptions are becoming a core feature, not a bug, of today’s land economy. 

• Creating a pathway for smallholder farmers: Agriculture research institutions such as Embrapa in Brazil are developing strategies to integrate solutions such as agroforestry and silvopasture for farmers of all sizes. Major philanthropies are also placing an investment focus on smallholder farmers, such as the recent USD 1.4 billion commitment by the Bill & Melinda Gates Foundation. 
• Improving productivity: In recent years, high-tech market leaders actively reduced their emissions footprints and increased competitiveness through precision agriculture technologies and automation. In forestry, the rapidly increasing suite of geospatial tools allows climate tech startups to monitor forest growth with high precision. 
• Targeting methane in production processes: Reducing livestock methane emissions is a particular focus because of the high abatement potential. For example, investment in feed additives can reduce methane emissions by 10 to 40 percent. At COP28 a new initiative raised more than USD 60 million for research into the rapidly growing suite of tech solutions that can reduce methane from livestock.  

What does 2025 hold for Orbitas? 

In 2024, Orbitas made great strides in illuminating these trends. Looking back at 2024, we’re proud of Orbitas’ work engaging companies and investors in FLAG sectors, providing critical insights into the financial risks and opportunities driven by climate transitions. We led deep dives into Brazilian cattle and soy production earlier in the year and developed a suite of tools to help stakeholders understand climate transition impacts on these sectors. More recently we showed the global picture of climate transitions for the land economy, and how companies and investors should respond. 

In 2025, Orbitas will dive deeper into the investible propositions these trends are creating. For example, we are starting 2025 by examining the investment potential of restoration in Brazil. Here, financing mechanisms such as voluntary carbon markets could play a significant role, working in parallel with the demand for sustainable forest products. It is therefore encouraging to see experts predicting carbon markets could be poised to rebound in 2025. Restoration is attracting particular attention – including a collection of some of the world’s largest and most climate-ambitious companies known as the Symbiosis Coalition which published its first RFP to provide up-front capital from credit buyers for high-impact restoration investments. 

We believe that understanding and preparing for the risks and opportunities driven by climate transitions is essential to the long-term success of the land economy. Orbitas was established to create a hub for economic and financial analysis that clarified the value at stake from ignoring climate transitions for FLAG sectors responsible for nearly a quarter of global emissions. The information gap is beginning to close, though significant work remains. The next step is motivating greater action.  

Join us in 2025  to develop new research, pilot projects and best practices for managing climate transitions across the land economy.

Orbitas is actively seeking new partners as we redouble our engagement with FLAG sector stakeholders exposed to climate transitions to help them navigate a prudent path forward.  Fill out the form below to get in touch with our team to see how we can navigate climate transitions together.